Three Quick Tips for College Financial Aid

It’s time for me to review financial aid files in preparation for filing our FAFSA next month. If you’re in the same position — or if you’ve never done this before — here are three quick tips to getting started with college financial aid.

1.  Be Strategic.

From the Wall Street Journal’s, How to Not Blow it with Financial Aid, understand the cost of assets being held in the wrong accounts. Money in the student’s account is allocated toward what your family can pay at a much higher rate than money in the parent’s account. This is logical, sure, as the parents have many more demands on their income and assets than the student. To follow on that logic, make strategic choices about where assets are held. The WSJ article quotes Mark Kantrowitz from finaid.org, an excellent resource.

For one thing, a child’s income and assets count heavily against their potential aid. Every dollar a child has in assets—that includes bank accounts or trust funds—cuts their possible award by 20 cents. Every dollar a child makes in income above $6,130 (the limit for 2013-14 aid) cuts their possible award by 50 cents.

Before the base income year starts, parents should transfer the child’s assets—that includes any money in checking and savings accounts—into a 529 plan, a tax-advantaged savings account for college, says Mr. Kantrowitz.

2.  Be Honest.

Any information families provide as part of their FAFSA will be verified by tax filings with the IRS. This can be done via the FAFSA/IRS direct interface or it will be done by the college requesting copies of past and current tax forms.

Take a look at this recent case, Attorney Disbarred for Submitting Falsified Tax Returns for Financial Aid, shared by Kelly Phillips Erb who blogs about tax at Forbes. The lawyer filed false financial aid forms, then submitted falsified tax returns to the private secondary school in support of the forms. Note:  he did not file the false returns with the IRS, he altered existing returns and give them to the school to back up the financial aid forms. No matter, “He sacrificed his career and his reputation for between $6,000 and $8,000 per year.” This from an attorney who had been a partner in a firm that shared $1.5 million in profits per partner last year.

As the cost of education skyrockets, parents feel trapped to pay for school – and some of them consider lying in order to get financial aid. And yes, financial aid forms require that you submit supporting documentation, usually pay stubs or federal income tax returns. Here’s where folks get into trouble: they lie on their tax returns in order to skew the numbers for financial aid. Sometimes it’s overstating deductions (bad) or omitting income (really bad). Other times, it’s lying about dependents, exemptions and in some instances, marital status (really, really bad). In almost every instance, one lie leads to another because it’s hard to keep up. Just like with Golden.

3.  Be Careful.

This quick read, Ten Common FAFSA Errors Parents Make, can help all of us avoid simple mistakes that might cause disastrous consequences. [Hat tip to Susie Watts for the link.] See the article for a brief paragraph on each mistake, but here’s the list:

1. Failing to Submit Because of Income (High or Low)
2. Waiting Too Long to Submit
3. Submitting Incorrect Info for Divorced Parents
4. Understating Income
5. Overstating Assets
6. Misquoting Real Estate Assets
7. Misplacing Information
8. Choosing to File Paper Vs. Electronic
9. Failing to Consider Each Question Carefully
10. Forgetting to Save as You Go

Good luck to families working on their taxes and financial aid forms. Good luck to all the high school seniors still working on completing college applications. I can only wish this time next year you are as happy at your selected college as Mod Squad Pete has been at his.

Next up:  2013 brings Mod Squad Julie to the year of SATs, more college visits, and — finally — college applications. Happy New Year!

Related articles

• Is Financial Aid Worth the Hassle? (DrStrangeCollege)
  
• Who Should Complete the FAFSA? What About Parents of Newborns? (DrStrangeCollege)
  
• FAFSA Tips and Tricks for First Generation Students (nerdwallet.com)

2600 or so 4-year colleges in the US; 10 agreed to greater clarity in financial aid letters.

Last week a few colleges met with the White House to discuss financial aid award letters.

Minnesota Senator Al Franken. Image via Wikipedia

Representatives from ten colleges, out of the 2618 traditional four-year colleges in the US, agreed to work on their letters to provide clearer information to prospective students.

That’s a depressingly small number of colleges taking this step, but it’s a start.

Many individuals and agencies have been asking for greater clarity and transparency in financial aid award letters for some time. To name a few…

Kim Clark and Paul Jaegersen developed a website focusing on this issue three years ago, providing real examples and an excellent financial aid glossary. I wrote about it here: Grading Financial Aid Award Letters.

Last fall the Consumer Financial Protection Bureau distributed their proposal for a better format for financial aid information dubbed, Know Before You Owe. See: Homework from the Consumer Financial Protection Bureau.

President Obama announced and supported the Know Before You Owe financial aid shopping sheet. Until his biography became a bestseller both Mr. and Mrs. Obama had significant student loan debt. From the EdWeek article by Caralee Adams, Obama Hopes Initiative Will Better Inform Student Borrowers:

“I promise you, I wish Michelle and I had had that when we were in your shoes,” said Obama, who spoke about their $120,000 in student debt that they paid off over 10 years.

The President further supported this effort in January. From Obama Outlines Details of College Affordability Proposals, written by Caralee Adams:

The administration also would like make the financial aid shopping sheet, announced in October, a requirement for all schools to make it easier for families to compare college financial aid packages.

A couple of weeks ago Minnesota Senator Al Franken and eight co-sponsors introduced legislation, “Understanding The True Cost of College Act,”  to require more clarity in financial aid award letters, requiring colleges to use a standard format to provide easier comparison of offers as well as differentiating between grants and scholarships (“free” money) and loans (repayable). See Senator Introduces Bill for Standard College-Aid Letters.

I think this is all a good thing. I’m, um — you can fill in optimistic, foolish, or naive –  enough to think this is something many people could agree upon. Clarity, transparency, consumer awareness, right? Sure there may be valid concerns about increased regulations. But balance that against ensuring prospective college students understand the details of the financial agreement they are accepting?

Of course, there are other opponents. Namely, the college financial aid officers themselves.

The National Association of Student Financial Aid Administrators, NASFAA, responded to possible legislation with the following, Financial Aid Administrators Advocate Lawmakers to Resist Standardization of Award Letters:

FAAs told lawmakers that improvements to award notifications are of course desirable and a certain level of defined terminology would be welcome, but the regulation of award letters could interfere with an institution’s ability to meet the specific needs of its unique student body.

Instead, NASFAA released their suggestions for improving financial aid award letters, listing ten elements that should appear in a financial aid package. See Consistent and Clear Financial-Aid Award Letters Urged, by Caralee Adams in EdWeek.

While NASFAA recommends standardization of certain award-letter terminology and elements, it acknowledges that there needs to be some flexibility for institutions to customize communication for their own student populations.

The full report, a 15 page pdf, can be found on this page: Improving Award Letters and Consumer Information, on NASFAA’s website. A short video also presents their case; a couple of clips:

Some lawmakers contend that award letters can be difficult to understand and compare.

…

Our members have the best working knowledge of the student financial aid programs. Their recommendations will help maximize the effectiveness of award letters and also avoid unintended negative consequences of standardization.

I have no arguments with the recommendations made in the report. NASFAA calls for standardization of content, terminology, and definitions. I still want to see a standardized letter required. Our experience with the required net calculator indicates colleges will implement generalized requirements to very different degrees.

What’s your preference? Less regulation, let each college decide… or a standard format from all colleges so students can truly compare?

Related articles

• 10 colleges, systems agree to use White House shopping sheet (insidehighered.com)
• How to improve college financial-aid award letters (costofcollege.wordpress.com)

Harumph. I looked for clarity in financial aid award letters.

This Spring our family went through our first round with college acceptances and financial aid award letters. I anticipated more structure to the entire process than we experienced.

FAFSA.ed.gov: where it all begins.

I had this preconceived notion that at the beginning of April 2012 Mod Squad Pete would actually receive a number of financial aid award letters on or about the same time he received word of any college acceptances. I saw us lining them up on the kitchen table to look at them all at once. I imagined opening up a new spreadsheet to plug in the numbers for apples to apples comparisons. I guessed that one or two colleges would share more information than the others, to help identify holes of data that needed to be researched.

Our experience wasn’t anywhere near that clean.

We received our best letter first; it was dated March 28th.

At the top of the letter, College 1 spelled out:

• Student Cost of Attendance [COA]
• Expected Family Contribution [EFC] from FAFSA
• Outside Aid (includes scholarships and grants from other organizations or states)
• Financial Need (COA less EFC less Outside Aid)

In a separate chart, under the heading “Awards”, the college listed scholastic awards, grants and loans. The college made sure the total, including loans, added up to the COA.

Why is this important? Let’s say your student applied to a college and received these numbers in the top of the letter:

1. COA = $48,750
2. EFC = $35,000
3. Outside Aid = $500
4. Financial Need = $13,250

Then let’s say separately, under Awards, the college lists the following:

1. Founders’ Merit Scholarship = $2,000
2. Direct Unsubsidized Loan = $2,000
3. Parent PLUS Loan = $2,000
4. Total Awards = $6,000

Maybe it looks good at first glance. However, while the college has identified $13,250 in need (after the family has come up with $35,000), they’ve provided $2,000 in scholarship money, proposed $4,000 in unsubsidized loans, and ignored the further need for $7,250.

The letters from College 2 and College 3 were similar to each other. Both listed the COA in tiny type, made no mention of the EFC, spelled out the offer (including grants, scholarships, and loans) and provided a total for the offer, making no reference to the EFC or comparing it to the COA.

College 4 still needed further information from us in late April when MS Pete took it off his list.

We received his last financial aid award letter (from College 3) on April 26, four days prior to National College Decision Day.

Fortunately, we had discussed the options enough by late April that we knew Pete could make his choice of college based upon his own preferences, rather than the net cost. But what about the student and family who are making the choice based upon the bottom line? What about the family that truly wishes and/or needs to make direct comparison between offers?

Here’s another description of the problem, from Inside Higher Ed, How Standardized Should Financial Award Letters Be:

“The aid is fairly standard, but it is not always displayed in the same way from letter to letter, which I think can be very confusing for all kinds of intelligent people,” said Catherine Ganung, a college counselor at the Taft School, a private high school in Connecticut, who previously worked as a financial aid director at Bates College and Hawaii Pacific University. Her students’ families are often financially savvy — many parents even work in banking — yet are flummoxed by financial aid award letters, she said.

In one case, she said, a student had letters from two private nonprofit colleges offering substantially different financial aid packages — and ended up thinking the one requiring more loans was a better choice than the alternative with lower out-of-pocket costs. “He was so swayed by the persuasiveness,” Ganung said. “It really seemed like, ‘Good news! We were able to meet your needs.’ ”

In other cases, colleges will include PLUS loans, which parents must qualify for, as guaranteed aid, or assume that students will earn their maximum allowed benefit from a work-study job, she said.

A number of people and organizations are paying attention to requiring standardized letters, and a few are opposing it — more on that to come. Our next go-round with financial award letters will be April 2014. Here’s hoping they offer more clarity by then.

Related articles

• The end of confusing financial aid awards (cbsnews.com)

Follow-Up: Time to double-check FAFSA and Profile submissions

I completed our financial aid docs in late February, posted about the process here February 29th, and promptly archived all thoughts about it in the back of my mind.

Until yesterday. I remembered to send questions to the commenter who said, very nicely, I should have completed all the paperwork earlier. In response to my questions, Jim Lundgren of Access College Foundation reminded me of the steps FAFSA requires:

1. File using estimated tax numbers,
2. Confirm/correct once tax returns have been completed, and
3. Link to the IRS Data Retrieval Tool.

Jim made the point that steps two and three could be the same. However, since our accountant had electronic-filing-software-trouble the week our returns were completed, they were filed via paper. I will have to link to the IRS/DRT later (doesn’t take long to pick up the acronyms). Mod Squad Pete’s returns were filed electronically, but I’ll link to both sets at the same time.

With excellent timing, FAFSA also sent the following email to Pete last night. I’m not sure why it says the federal tax filing deadline has passed, but I welcomed the reminder:

FAFSA email screen shot

Imagine my surprise when I dug through my folders and saw this note attached to the Profile iDOC folder:

For those following along this ridiculously drawn-out saga of financial aid applications (which I think might only be Mod Squad Dad by this point, and he only because he has to), here is the final today’s update:

• Estimated Profile filed:  Nov 1.
• Estimated FAFSA filed: Feb 1.
• Updated Profile filed:  Feb 25
• Taxes filed:  Feb 27.
• Returns submitted to colleges requiring Profile:  Feb 27
• FAFSA updated with real tax return numbers (minor change):  March 13
• Profile iDOC submission status checked:  March 13

iDOC status screen shot

There. Done. For now.

Related articles

• Our long and winding road of financial aid deadlines: FAFSA, Profile, 1040 (drstrangecollege.wordpress.com)
• 5 things I learned when I completed the FAFSA (drstrangecollege.wordpress.com)
• Why so much concern about making mistakes on the FAFSA? (drstrangecollege.wordpress.com)

Who gets financial aid? Who pays for it?

Those two questions about college financial aid are being looked at by everyone nvolved with higher education — the colleges themselves, state and federal governments, students and parents, consultants, lobbyists… everyone. But especially, the governments.

Virginia State Capitol. Image via Wikipedia.

Kevin Kelly, who writes for Inside Higher Ed, just took a look at how state governments are trying to shape financial aid decisions, in Not From My Wallet,

Think of it as the latest iteration of the “not in my back yard” argument. Most people want higher education for their children, and most people think it’s a good idea for other people’s children to have higher education, too. Just don’t ask them to pay more for it.

I’d recommend reading the entire article. Here are a few state details.

Arizona (bill proposed, subsequently withdrawn):

A bill recently approved by a committee of the Arizona House of Representatives, House Bill 2675, would require full-time students at Arizona’s three public universities to pay roughly $2,000 toward their education costs, a price that could not be covered by grants, tuition benefits, or scholarships funded through public money, including federal aid.

Virginia:

Earlier this month, the governor of Virginia proposed in his budget to cap the amount of in-state tuition revenue that could be used to fund financial aid for other students. The state’s secretary of education, a position appointed by the governor, said the measure was designed to spark conversation about what aid polices should be and whether some students should be footing the bill for others.

North Carolina:

A few weeks later, members of the University of North Carolina system’s Board of Governors pushed to adopt a similar policy. When that was rejected by the full board, they began to push for a tax break for families who did not qualify for financial aid. Board members in favor of the tax break said that subsidizing other students’ education should be considered a charitable contribution, and therefore such families should be entitled to a tax break.

The UNC proposal is particularly interesting given that the state has a history of requiring institutions to funnel money from tuition hikes back into financial aid budgets.

New York:

he State University of New York system recently adopted a similar policy. When Governor Andrew Cuomo approved a $300 yearly tuition hike for the next five years, he required that students who qualified for the state’s aid program be held harmless. As a result, about 20 percent of last year’s hike became institutional aid for low-income students.

The question at the heart of these proposals is whether a college degree “is a public good or private good.” The answer may well depend upon when the question is asked. The Governor of Virginia has set a higher college graduate rate as a goal for our state. Yet with the higher education bubble continuing to expand — higher tuition leading to more financial aid and higher student debt — who pays for the increased numbers of grads?

Increasingly, the states are saying it’s not them.

Related articles

• HIGHER EDUCATION BUBBLE UPDATE: Why They Seem to Rise Together: Federal Aid and College Tuition. … (pjmedia.com)
• In Wash., more financial aid, but also more need (seattletimes.nwsource.com)

Is financial aid worth the hassle?

Image via Wikipedia

A friend wrote a couple of days after missing the March 1st FAFSA priority deadline to ask if their family should still submit. They didn’t think they would qualify for aid, it was past the deadline, would it be worth the hassle?

The best response I could give is to run the federal FAFSA forecaster, found here. If the family’s Expected Family Contribution, EFC, is higher than the total estimated cost of college, then maybe don’t bother.

Complexity.

Why does the FAFSA process need to be so complex? Tim Johnson, writing for the Burlington Free Press, doesn’t think it should be. See FAFSA SCHMAFSA II:

You have to complete and submit the FAFSA (otherwise known as the Free Application for Federal Student Aid) to qualify for Pell and other federal grants, as well as for federal loans. Yet the FAFSA has more questions (116) than the Form 1040A (84) or 1040 EZ (38), the IRS tax forms most commonly filed by ordinary people.  What’s more, the great majority of those 116 questions are largely irrelevant to the determination of how much student aid the applicant will qualify for. In fact, the FAFSA could be dramatically simplified without appreciably affecting the distribution of aid. We learn all this from an eyeopening paper, “Student Aid Simplification: Looking Back and Looking Ahead,” by Susan Dynarski and Mark Widerspan of the University of Michigan.

Who’s receiving aid?

Financial aid is getting tougher for even the neediest. Grace Nunez, writing at Cost of College, wrote Reminder – automatic zero EFC maximum income dropped to $23,000.

Last month Congress made it harder to qualify for an automatic zero EFC by reducing the maximum income allowed from $32,000 to $23,000 for the 2012-13 Award Year. A zero EFC usually makes a family eligible for the highest amount of financial aid.

This significant change seemed to have stayed mainly under the radar, even though it will hit low-income families hard since over 4 million students qualify for the automatic zero provision this year. Perhaps some provisions of President Obama’s 2012 “Blueprint for Keeping College Affordable and Within Reach for All Americans” will counteract this benefit cut to poor families.

We approached financial aid with the attitude that we wanted to see every option available to Pete. We know that any level of aid offered from a very selective private college will be very different from that offered by a public college — we await letters and the exercise of comparing all costs and any possible awards. Of course, as a commenter wrote last week, we could learn that the Federal Government thinks we should contribute 60% of our income to college.

For next year, when we’re only dealing with one college, I’ll anticipate a simpler process (and an increased tuition and fees total, natch).

Two years from now, we’ll be back at it with a number of college apps for Julie and an EFC to reflect two students in college.

Lots of articles out now, too, about who pays / should pay for financial aid? More to come.

Related articles

• Who should complete the FAFSA? What about parents of newborns? (drstrangecollege.wordpress.com)
• Catch-22: how and when to complete the FAFSA and your tax returns. (drstrangecollege.wordpress.com)

Our long and winding road of financial aid deadlines: FAFSA, Profile, 1040

Done. I’ve completed the financial aid forms. Not a moment too soon:  most of Mod Squad Pete’s colleges required all the paperwork by March 1st.

• Friday, I picked up our completed tax returns from the accountant.
• Saturday, I cleared the desk and ignored all sorts of Saturday chores (and fun stuff) to get the submissions done.
• Monday, I mailed the final packages, scheduled to arrive today, February 29 (thank goodness for leap years).

I’m not whining — this is all in aid of requesting college funding from various sources other than our own checkbook.

I am writing the paper trail here, in case others want to read about what it takes –  and so I’ll remember some of this in two years when we go through similar steps for M. S. Julie.

Another thing to remember:  Pete applied to six colleges, each with its own detailed specifics on required forms, deadlines, and methods of submission. This in itself is the best argument for keeping Julie’s final application list lean and focused.

November 1, 2011

Pete submitted three Early Action applications; two colleges set the financial aid deadline for March 1 (same as for their Regular Action apps). One college (College A), with a November 1st Early Action deadline, required the CSS Profile that same day, as well as a paper copy of our signed 2010 1040 (including all schedules and forms).

Completing the Profile in the fall of 2011 for the 2012-13 school year required three sets of finances:

1. Actual 2010 figures from the filed 1040,
2. estimated 2011 figures (before the year is over), and
3. guessed-at 2012 figures (before the year is begun).

This might be easier for households with incomes that stay fairly steady; this presents a bit of a nightmare for households with incomes that vary, such as small business owners, consultants, realtors, farmers, salespeople, etc.

January 2012

The FAFSA became available January 1st; all schools recommend it be submitted as soon as possible. Some states set a deadline in mid February. All six of Pete’s colleges required the FAFSA submission by March 1.

Completing the FAFSA requires figures from the 2011 tax returns. We provided as much information as we could to our accountant, including non-official data that would be confirmed by 1099s later, and asked for a draft return.

February 2012

With a draft 1040 in hand I submitted the FAFSA on February 1st.

Mid-February, Pete received an email from the Profile, referring to College A’s need for our 2011 tax return. The email linked to CollegeBoard‘s iDOC site. After signing in, the site presented Pete the list of forms College A required along with the cover sheet to be mailed to an address in Illinois by March 1. Remember ‘do not fold, spindle, or mutilate’? See these instructions in the right-hand column:

Click to enlarge.

Also mid-February we received our final 1099, sent it off to the accountant, and awaited our final returns. Those were done February 24th. That’s the earliest I’ve ever filed taxes, and I suspect we’ll be filing in February for, say, the next nine or ten years.

Looking at the specific requirements for six colleges, here’s what we had to file:

• College A: Profile and 2010 returns, Nov 1; FAFSA, Feb 1; iDOC submission [by mail] of completed 2011 returns, Feb 27.
• College B:  FAFSA only, Feb 1.
• College C:  FAFSA, Feb 1; Profile, Feb 25; completed 2011 returns by fax*, Feb 25.
• College D:  FAFSA, Feb 1; Profile, Feb 25; completed 2011 returns by mail, Feb 27.
• College E  FAFSA, Feb 1; Profile, Feb 25; iDOC submission [by mail] of completed 2011 returns, Feb 27
• College F:  FAFSA, Feb 1; Profile, Feb 25. 2011 returns will be requested if student accepted.

* We had a fax machine in our home office from 1992 until 2007 when we chose to not replace the no-longer-working machine since we can sign and scan documents. This required a trip to Staples, much ingenuity from the print shop manager to actually get 40 pages to feed, and a $48.00 bill.

March 1, 2012

Within a few days I’ll ask Pete to sign on to each of the college student information systems to check for any further instructions.

For now, though, I think Pete can just focus on the rest of his non-college life and I can do the same. Hurrah.

Let me know, in comments, if you faced any different or additional requirements.

Related articles

• Who should complete the FAFSA? What about parents of newborns? (drstrangecollege.wordpress.com)
• The Choice Blog: Accepted and Relieved, Until Thoughts Turn to Financial Aid (thechoice.blogs.nytimes.com)
• Filing a FAFSA? (uvmadmissions.wordpress.com)

Good news for the educated-college-consumer: Know before you go!

One of my goals in reading about higher education is for our household to become better educated consumers before we spend a small fortune to educate three children.

This has led to discussions about:

• how much money we think it makes sense to spend for a Bachelor’s Degree,
• how many years it should take for a student to earn a BA,
• which colleges retain more students,
• which colleges actually have more students highly engaged in learning, and more.

Those discussions have led us to dig deeply into college websites. Which sometimes leads to frustration.

Yes, much of this information can be found, given enough time, interest, and strength in search skills for a wide variety of websites. Except for that ‘engaged learners’ bit — the Pew Foundation gathers that information and the colleges, for the most part, don’t share the results.

Since we still have to perform a lot of our own research it would be handy if much of the basic information were readily available in a clear, easy to compare format.

Apparently the White House thinks so, too, and so does the New York Times, which endorsed the government’s proposal in today’s editorial:  What College Students Need to Know.

Congress has taken some steps to mandate greater transparency from colleges. The 1990 Student Right to Know Act, for example, required colleges and universities that receive federal aid to disclose graduation rates. And the 2008 Higher Education Opportunity Act required schools to offer a way for consumers to determine actual costs after student aid is taken into account.

But many colleges have done a poor job of complying with federal disclosure rules, and much of the available information is not in one place. The administration’s new efforts would enforce reporting requirements and provide some new tools.

I wrote about one of those tools,  the Consumer Financial Protection Bureau‘s proposed Know Before You Owe worksheet, here.

College Value Profile. Click to enlarge.

The other tool the editorial endorses is the Department of Education’s proposed College Scorecard, which can be read about here. You can download a pdf of the scorecard from that link; here’s a quick screenshot.

Also reported today, in the Chronicle of Higher Education, is more disclosure on Virginia colleges and the jobs their graduates find. Take a look at Taking Some of the Guesswork out of the Value of College Question, written by Jeff Selingo.

Of course, not all colleges or majors are created equal. And it’s nearly impossible for consumers to get any information about how much a graduate in a specific major from a particular university earns. That’s probably one of the best measures of the return on investment in higher education, but, as with so many other tools that would allow consumers to make bottom-line comparisons, colleges are loath to share such information. In the absence of data, it’s easier for colleges to sell the dream of higher education at any cost.

…

Like politicians elsewhere, Virginia lawmakers have heard such complaints from parents and decided to do something about it. Over the last two years, the state legislature has passed two bills that, beginning this spring, will give families access to a key component in answering the value-of-college question: median salaries for the graduates of hundreds of academic programs across every public institution and some private colleges in the state.

The public database, which is expected in April, will allow students and parents to look at potential earnings over a six-year period in several ways. They can look at a specific program to see median earnings by type of degree (a certificate vs. a two-year degree in information technology, for instance) or across institutions (an English degree at James Madison University vs. the same degree at George Mason University), or majors across a campus.

Read the full article for some important caveats and for Mr. Selingo’s prediction that other states will see the need to follow Virginia’s lead.

For Mod Squad Pete, Julie, and Linc to create their own post-college opportunities, one of their best shots is to be highly engaged students in college. They can control that part of the equation. They should be able to access information on the pieces of the equation they cannot control, such as:

• how will a college support their efforts both for learning and for career planning,
• will it be possible to graduate in four years, given course and pre-req schedules,
• where does higher tuition go — into the classroom, another luxury dorm, or the Chancellor’s paycheck,
• how many classes are taught by full professors, how many by grad students, and how many by adjunct,
• and — given the recent news about Claremont-McKenna — how honest the college is with any of this data?

I’d love to get the basic info either of these proposed reports offers. That would free up time to dig deeper on some of our other questions.

Do you think these reports would help? Please let me know what you think in the comments below.

Related articles

• 3 reasons why colleges are in trouble (cbsnews.com)

Why so much concern about making mistakes on the FAFSA?

Read almost any college or financial aid related blog during the winter and you’ll see at least one post warning against making a mistake on the FAFSA. Including me; I’ve written about it a couple of times:

• 11 Mistakes I don’t want to make on the FAFSA
• Catch-22: How and when to complete the FAFSA and your tax returns

Why the big deal about not messing this up?

1. The amount of money at risk is substantial. The FAFSA computes your Expected Family Contribution [EFC], which the colleges use to compute any financial aid, from grants to work-study, to determining how much of a loan could be subsidized vs. unsubsidized. Accidentally include a $450,000 family home in your assets? The parents’ total unprotected assets x 5.64% are included in your ability to pay. There’s a potential $25k mistake.

2.  It’s difficult (impossible?) to know if you’ve made a mistake. My friend, Kim, called a couple of weeks ago as she worked her way through the form and made this point:  how would you know? The math and algorithms involved are complicated, we’ve been led to expect a higher EFC than we’d like to pay, and how could you check it if you did think it was wrong?

Brent Hunsberger, writing about the FAFSA for The Oregonian, says:

“The questions are deceptively simple,” Wagar says. Yet its instructions and behind-the-scenes calculations are as dense as its acronym. Mistakes can costs you hundreds, even thousands of dollars in aid each year. Once the form’s submitted, Wagar added, there’s no easy way to know you made a mistake on it.

“Even lawyers, Ph.D.s, they screw it up,” said Paula Bishop, a certified public accountant in Bellevue, Wash., who specializes in college planning. “It’s a shame, because some don’t go to college because of it.”

The advice he quoted from financial aid consultants:  Pay attention.

The advice I received from Mod Squad Dad when I thought it was done and wanted to (nay, ached to) submit it late one night:  sleep on it and check it again in the morning.

Good luck on the FAFSA. I’m off to plug real 2011 numbers into my filed-early-with-estimates CollegeBoard Profile.

Related articles

• Reader questions: Help filling out the FAFSA college financial aid form (oregonlive.com)
• Completing the FAFSA form just got a lot easier (cbsnews.com)
• YOUR FAFSA FACTS NEED-TO-KNOW for 2012/13 COLLEGE YEAR (thecareercloset.com)

What does college cost? How does financial aid work?

There are a couple of questions that might seem to be easily answered. Not. So. I continue to be amazed at how complicated the answers are.

Fortunately, given the Net Price Calculators, more transparency has been shed on the net price for colleges. They’re not perfect, nor universally clear, but they are better than what was available before and I hope they continue to improve with use and feedback.

The calculators have the potential to help high school students and parents understand the difference between a college’s sticker — or advertised — price and its net price — after grants, work-study, and the Expected Family Contribution have been factored in.

A couple of recent posts helped to point out background information on both of these questions.

First from Suzanne Shaffer at Parents Countdown to College Coach, here’s advice to ignore the sticker price and an infographic for explanation: see College Sticker Price. I’m including a screenshot of a portion of the infographic; click the link to see the full image.

via Parents Countdown to College Coach

Next, from Murray Miller at Student Advisor, 7 Surprising Financial Aid Facts That Could Save You Thousands. I’m listing the facts below; click on the link for more information on each point.

1. Some colleges have more to give than others.
2. High sticker price colleges can cost less than “cheaper” state schools.
3. “Forgotten middle class” families receive generous grants, scholarships and other financial aid.
4. Grades have little to do with financial aid awards.
5. Two families can have the same amount saved — but one will receive far more financial aid because of where they saved.
6. Graduation rates differ — more than you realize.
7. The financial aid office may not be your best resource…

Finally, I thought I would offer some of the clearest advice I’ve seen. It was a newspaper article tweeted by @Scorebusters near the end of the year, titled “Three tips to reduce the cost of college.” Unfortunately the article has disappeared behind a paywall. Here are the tips:

1. Focus on academics
2. Maximize aid
3. Finish on time

Right. There you go, Pete:  a new family mantra.

Related articles

• College costs – sticker price vs. net price (costofcollege.wordpress.com)
• Online tool helps predict college costs (seattletimes.nwsource.com)